Try Sharif Street who was once using his legal skills to lobby on behalf of predatory payday lenders and cash advance stores [like the oh so good Currency Ones which plague our city like locusts]. Considering that cash advance and payday lending stores love minorities on low wages since they have few options to turn for credit elsewhere, I though it to be a fitting legacy for him when he was running for Council... only to have Milton Street give up for mayor and then challenge him for the same open seat.

And BTW that was the same Milton Street, the relative who pissed off a gaggle of African-American concession license applicants who were trying to get spaces at Live Eight which John Street gave to Milton for free on the consultation of nobody. Apparently none of the Street family ever wanted nor were destined to build a legacy of progress in the black community. Hopefully they will be forgotten.

Back to this, we are quite lucky the number is only around 44,000 and not 144,000 homes. We did however spend a ton of City money in bonds demolishing homes that weren't paying any property taxes, and we still have a gaggle of non-performing properties remaining.

The RDA is also sitting on a mountain of property that needs to be sold since the RDA has no resources to actually redevelop anything.

We have an amortized hole of a half billion dollars sitting on Nutter's 5 Year Plan which doesn't take into the account that business in Philadelphia is likely to not increase, we are still winding up with a net loss in taxpayers year over year, and the gloomy economic conditions probably mean that hole in the budget is going to get worse rather than get better.

If another KOZ property appears on the landscape, it could blow an even larger hole in BPT receipts much like Cira did when every Center City law firm scurried to find space in the building to get out of Philly's onerous tax system.

Don't forget Tasty Baking Company, which we had to bribe to keep it from moving to Montgomery County.

And there is Blackrock, which is likely to remain in New Jersey or move to Wilmington since it refuses to pay BPT--and we'll likely give an ultimatum that they WILL have to pay BPT now and give up the millions of dollars of Wage Tax money and associated sales tax receipts Blackrock employees would generate just so we can feel proud that we said no to them.

Would you bet your life savings on Philly's BBB- rated bonds? I wouldn't.

We need a fundamental shift in the City and in Harrisburg in how we deal with taxation to keep us solvent and to increase business activity in Philadelphia. Party and ideological affiliation be damned.

We cannot continue to shoot the middle finger at companies who look Philadelphia over as a place to do business and decide it's not worth the trouble.

Dan U-A:

Here are some points to correct your statements.

1) You say "Predatory Lenders". What say you about the "Predatory Mortgage Brokers" - who conspired with the home owners/prospective home owners to doctor up the income section of the paper work to make their loan candidate look favorable - beyond their actual standing? I have little doubt that you support more STRINGENT credit and down payment requirements. For sure.

2) [quote]Fast forward 7 years, the house of cards that is Wall Street has finally fallen[/quote]
Why do you say "7 years"? What particular set of information has you to stick on "7 years"? Perhaps you should see the this and note that the same finger prints that brought us "good times" moved into real estate and did the same type of run up in valuations: http://www.nettime.org/Lists-Archives/nettime-l-0007/msg00055.html

Eerie, isn't it?

3) [quote]provide a 700 billion dollar golden parachute for stockholders and CEO's[/quote]
Where are you getting your information from? Or do you not have any particular commitment to accuracy?

The STOCKHOLDERS of Fannie Mae, Freddy Mac, Lehman Brothers - were LEFT OUT. Their stocks are worth ZERO!!!!!

Let's think about the $700 billion. Though I am pissed that the federal government chose to "NATIONALIZE THE LIABILITIES", you are looking at this incorrectly. This indeed takes these risky loans off of the balance sheets of the evil corporations and transfers it to the government. Paulson and others unwittingly provides the "good guy" Progressives ammunition in the future for more socialistic control over these institutions and the amount of money that their CEOs can make. If the government is left holding the bag in the end it may as well control them from the start - is what this episode has sadly shown.

At the same time you are mischaracterizing the $700 billion. The government will assume the assets (houses) in exchange for the paper and they will see these houses and receive the residual proceeds. By no means will this be at their inflated price but it won't be at $0.01 on the dollar either. If you progressives were smart you'd try to get the government to sell these houses to the "underserved" at very favorable terms.

Thus my main point is that this is not a straight forward payout but a transfer of assets as the asset is sold for whatever the sales price.

4)[quote]entire business model focused on going after vulnerable homeowners. [/quote]
Yet another very inaccurate statement. WALL STREET is in the SECONDARY MARKET!!!
They are not LOAN ORIGINATORS!!!

It was the loan originators and the MORTGAGE BROKERS who primarily dropped the ball. With fraudulent paper work that was doctored and then originating banks who did not do enough due diligence on the front end to verify the integrity of the qualifications of the borrower - bad paper was inserted into the market.

The loan originator knew that all they needed to do was to bundle the mortgage and sell it off in the secondary market and these down stream firms would be left holding the "exploding mortgage".

I will defend "Adjustable Rate Mortgages" until my dying day. My wife and I as newlyweds used an ARM to get into our first home. We did not have the credit history together to qualify for traditional financing. Or CREDIBLE mortgage broker told us to pay our bills on time for 1 year and then GET OUT OF THE ARM into a fixed rate. We did just that and we refinanced shortly there after.

An ARM should be used to get you into a house. It should NEVER be used for a 30 year vehicle for mortgage. All of these "interest only loans" and "no -income verification loans" which were originally created for individuals with unique circumstances were increasingly used to get whomever into a house.

Oddly enough the long heard claim of "lack of access to credit" was addressed - just with some unsavory characters doing the operations.

I wonder if YOU will also be willing to conclude after this fiasco that "Some people who are denied credit DON'T DESERVE IT IN THE FIRST PLACE"? Lowering the credit standards has unintended consequences. (Of course in your mind it is all the evil corporations who are responsible for this. No co-conspiring home owners or mortgage brokers from their same communities)

Yet another very inaccurate statement. WALL STREET is in the SECONDARY MARKET!!!
They are not LOAN ORIGINATORS!!!

Too bad this statement is not true.

Once, Wall Street was the secondary market. But then Phil Gramm and John McCain repealed Depression-era financial regulation (the Glass-Steagall Act) that mandated the separation of commercial and investment banks thereby permitting the same entity to control both what "Constructive Feedback" characterizes as the primary market and secondary market.

It was the lack of transparency caused by the repeal of the Glass-Steagall Act that allowed Mortgage Brokers to act without proper oversight. Because the mortgage brokers and the entity issuing mortgage-backed securities were now the same entity, there was no way for the purchases of mortgage-backed securities to ascertain things like whether the underlying loans would ever in fact be paid off.

McCain and Gramm removed the mechanism that that enabled, as "Constructive Feedback" put it, "the due diligence on the front end to verify the integrity of the qualifications of the borrower."

For more read: Day 16: McCain's Support of Financial Deregulation Caused the Mortgage Crisis.

1) I did not say that "Wall Street did not know what they were getting into". I support the proposed change in which a loan originator is forced to hold onto the loan for 2 years. This would cause them to raise their lending standards and/or motivate them to do the due diligence to insure that the person truly qualifies.

I know that you progressives like to act as hero Robin Hoods. It is interesting, however, that groups such as ACORN have been on the front lines regarding the drive for "access to capital". While I am sure they did not envision the amount of shady mortgage brokers marketing into "underserved" communities nor banks and the secondary markets doing a wink and a nod to approve loans that should never have been closed - but you can't pretend that there was a system of complicity on all levels - consumer borrowers, mortgage brokers (many of them from their own communities), originating banks, Wall Street, government regulators asleep at the switch and international investors.

The market for Home Equity Loans that freed up cash and allowed people to maintain their debt ladened lifestyle and the drive toward getting "first time home buyers" into a house were the primary driver for this. Those down stream saw great opportunity for investment profits and the rest is history.

I am not sure if you read the article about the Internet bubble that I have posted above. It shows that the very same names who are in the news now - Merill Lynch, Morgan Stanley, Lehman Brothers, Goldman Sachs, Credit Suise - drove up the stock values back then just as they moved into real estate when the Internet bubble burst. There was no desire for the government BACK THEN to regulate themselves into a market slowdown for the sake of MARKET SECURITY and thus slow down the GDP growth, the job creation growth or the positive influx of capital into the federal treasury and into people's pockets.

Some of your progressive soulmates HATE capitalist "sausage" being made......but love to eat it and live the lifestyle that it affords.

[quote]And could you cite me anything that says Paulson would act like that? Of course not, because it doesn't exist. He just says we should trust him, and make it illegal to challenge whatever the hell he decides to do.[/quote]

Let us walk through the LOGIC of this.

The US Government is going to purchase risky loans from the banks.
Do you agree that THE US GOVERNMENT will have title to the HOMES at this point?

So at this point have a payout of the full mortgage balance to the bank from the government. The ultimate spread between the payout amount and the eventual SALES PRICE of the home when the government unloads it to a consumer is the amount of LOSS (ie expense to the tax payers) for this bailout.

Stop right there and tell me where I am wrong? You are not factoring in the value of the ASSET into your analysis. I am making reference to the last big "pooper scooper" that was crafted - the Resolution Trust Corporation which did the same for the houses and multi-tenant units when the Savings and Loan fiasco happened during the late 80's.

While it is debated regarding if there was an actual net profit had by the government as it sold off these properties - no one can deny that the assets are NOT of ZERO VALUE and thus the sale by the government offsets the cost of the initial bailout.

Funny how you make my understanding of this as a factor of "believing Paulson". It has nothing to do with Paulson but instead an understanding of acquisition and sale of ASSETS.

**************

Glass-Steagall Act - http://en.wikipedia.org/wiki/Glass-Steagall_Act

I am not intimidated by your "throw it out and see what sticks" antics. Ironically enough the purchase of Merill Lynch by Bank Of America is a better example of the "violation" of Glass-Steagall than what you can claim as such in inspecting the Subprime Mortgage fiasco. In fact - I challenge you to ACTUALLY MAKE YOUR CASE rather than throwing the claim out.

The loan originators ARE (were) SEPARATE COMPANIES than those in the secondary market. Did Merill Lynch, Morgan Stanley or Lehman Brothers ORIGINATE MORTGAGE LOANS? Please detail.